WASHINGTON (8/19/13)--Construction of new U.S. homes increased in July--buoyed by a rebound in multifamily (apartment) projects that trumped a slowdown in single-family properties. However, the increase was still less than expected (The New York Times, Bloomberg.com and The Wall Street Journal Aug. 16).
Housing starts rose 5.9% last month to a seasonally adjusted rate of 896,000 units, following an 846,000-unit pace in June, the Commerce Department said Friday. Economists had predicted a 900,000 pace for July, according to a Reuters poll.
Also, permits for future home construction climbed 2.7% to a 943,000-unit pace, the department added. Economists had forecast a 945,000 unit pace, the Reuters poll indicated.
Although there still is a high level of housing affordability and it has not changed significantly historically, fundamentals are not as promising to new buyers as they were in the past few months, Michael Hanson, senior economist with Bank of America Merrill Lynch in New York, told the Times.
A recent increase in mortgage rates has thwarted some of the momentum in the housing recovery--and that was not unexpected, Hanson added.